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Stocks 303: Understanding the Statement of Cash Flow

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1.
In a statement of cash flow, accounts receivable are listed in the section on cash flows from operating activities.
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True. Accounts receivable are operating activities.
2.
The operating activities section of the statement of cash flow covers cash flows associated with _______.
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Production and sales. It concerns itself with the cash flows of making and selling the companys products or services.
3.
The statement of cash flow records inflows and outflows of cash as soon as income is earned or expenses incurred.
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False. It records income and expenses regardless of when they were earned or incurred.
4.
Creditors use statements of cash flow to keep track of their borrowers abilities to repay loans.
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True. These statements keep them informed about where their borrowers money is going.
5.
On a companys statement of cash flow, the sale of property is recorded as a ______.
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Cash inflow. It generates incoming cash.
6.
Equipment expenditures are included in which section of the statement of cash flow?
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Investing activities. Equipment is considered an investment.